Come mid-July, millions of parents will start getting monthly checks to help support their children.
In March, President Joe Biden signed a $1.9 trillion stimulus package that included an expansion of the pre-existing child tax credit. As part of the expanded credit, which is only for the 2021 tax year, eligible parents with children age six to 17 can qualify for up to $3,000 per dependent, and up to $3,600 for children under the age of six.
The U.S. Department of the Treasury and the Internal Revenue Service recently announced that advance payments for that fully refundable credit will start going out on July 15 and will be sent on the 15th of every month through December, provided that day doesn’t fall on a holiday or weekend. In 2021, parents can get advanced payments for up to half of the total credit they qualify for this year, and then receive the rest of the credit when they file their taxes next year. For an eligible family with a child under the age of six, that would be up to $300 per month, or $250 for each child age six to 17.
The expanded credit comes with some new income requirements: Single filers making up to $75,000 per year in modified adjusted gross income, heads of household making $112,500 a year or less, and couples filing jointly making up to $150,000 can qualify for the full credits. Above those levels, the payments phase out. But taxpayers with incomes above those levels can still qualify for the full original $2,000-per-child credit, if they make up to $200,000 as a single filer and $400,000 as a joint filer.
For parents expecting the child tax credit, this calculator from Omni Calculator (or this one from the Washington Post) can help you determine how much you might be eligible to receive based on your filing status, number and age of dependents, and income.
The IRS will launch a portal that should allow taxpayers to update information like how many dependents they have; the portal will also let parents opt out of receiving the advance payments if they’d rather get the whole amount at once when they file 2021 taxes.
For the 2022 tax season, the $3,000 child tax credit is set to revert back to $2,000 per dependent—unless, of course, Congress acts to extend it beyond the 2021 tax year. That’s something President Biden supports: Last month the White House proposed extending the $3,000 (or $3,600) credit through at least 2025. However, it’s unclear if (or when) the Democratic-controlled Congress would take that measure up.
